Annuity Advisor

When considering an annuity as an investment it is important to speak with an experienced, well-trained annuity advisor. An annuity advisor must have an active life insurance license and be properly contracted with the annuity carrier for whose product(s) they are soliciting. Additionally, if you speak with an annuity advisor who sells variable annuities, you must make sure that they also have the proper securities license.

How An Annuity Advisor May Help You

Along with being a fully qualified annuity advisor, the person you work with should be well experienced and knowledgeable in many other aspects of financial planning, especially retirement planning. An annuity is a retirement savings investment. Therefore there will be various other factors involved in determining if an annuity is an appropriate investment as part of your retirement portfolio. Your annuity advisor, and ultimately your retirement advisor, should be able to help you with tax planning, estate planning and investment planning.

What To Ask From Your Annuity Advisor

Here are some questions that you should ask your annuity advisor:

• Tax Treatment: They should be aware that the tax treatment of annuities are tax deferred, meaning that you will not have to pay income tax until you receive a distribution. If you are under age 59 1/2, you should also make sure that they inform you about the 59 1/2 early withdrawal penalty.

• Contract Term: You advisor should be very clear about the contract term. You need to know how long the contract term is, the amount you may withdraw without receiving a penalty, if there is a penalty for early withdraws and what it is, and how soon you can withdraw funds.

• Crediting Strategy: If you are looking at an equity indexed annuity, your annuity advisor needs to thoroughly explain the interest crediting strategy to you.

• Credentials: Ask your advisor about their credentials and what licenses they have. As explained above, they must have at least a life insurance license and if they are selling variable annuities they must also have the appropriate securities license. Some other highly respected credentials include: CFP (certified financial planner), ChFC (chartered financial consultant), CLU (certified life underwriter), and CASL (chartered advisor for senior living).

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